Ugandans have asked the biggest telecommunications service provider, MTN Uganda to consider listing on the local stock exchange to allow Ugandans have a say on how the profits raked by the giant multinational are utilized.
The issue came out prominently on Monday during a public hearing convened by Uganda Communications Commission (UCC) as a prerequisite before government renews MTN’s license which is due to expire in October this year. As the law demands, UCC is obliged to pick public opinion on a given service provider regarding its performance, so as to decide whether or not to renew the licence.
MTN Uganda which is a subsidiary of the South African telecom giant, MTN Group has been operating in Uganda for the last 20 years, providing mobile communication and money transfer services.
However, to date, MTN is not listed on the Uganda Securities Exchange as a public entity. This implies that Ugandans can not buy into the company as stakeholders and thus have little say on how the huge revenues generated by the telco are utilized, since the economy is liberalized.
During Monday’s public hearing at the UCC headquarters in Bugolobi, a number of participants questioned why MTN Uganda has been hesitant to list on the stock exchange. One of the speakers said that this has aided the continued freight of profits made from the local market back to South Africa, yet the company rakes billions from the over 11 million subscribers.
While responding to the issue, Wim Vanhelleputte, the Chief Executive Officer of MTN Uganda said that the proposal will be discussed with the MTN Uganda shareholders.
“It is clear that there is a genuine interest for the public to be shareholders. I will pass it to the shareholders because as Management, we have little influence,” Vanhelleputte said.
“We have listed in Ghana, Zambia and partly in Rwanda. There is no specific cause for not listing here,” he added.
Other concerns raised by the public included issues to do with unfair competition towards new service providers, offering vast services like Mobile Money, unfavourable regulations towards content providers as well as devices that don’t pass the safety standards.
In his comments regarding MTN’s supplementary services such as financial transfers, Anthony Katamba, the General Manager for Corporate Services at MTN Uganda said that Mobile Money services are offered in partnership with commercial banks which also benefit from tapping into the market created by the millions of mobile telephone users.
“MTN is not the only service provider offering Mobile Money transfers. Beside, this is on the basis of partnership with commercial banks. Banks need us because we create a market for them,” he said.
These concerns notwithstanding, many of the participants who interfaced with MTN officials vouched for the renewal of its licence.
According to UCC’s preliminary assessment of MTN’s compliance and performance over the last 20 years, the telco largely qualifies to have its licence renewed. However, the regulator has some reservations.
Some of these include financial, technical and competition related inefficiencies.
Fred Otunu, the Director of Corporate Affairs Director at UCC told the press that MTN Uganda is faulted for non payment of Shs 27 million in inspection fees, erroneous billings to some customers, delayal/denial of service to value added service providers and being unfair to other companies in sharing infrastructure like towers.
UCC also faults MTN for failure to resolve 24.5% of customer complaints within the 24 hour threshold in the last two years.
These issues must be remedied before UCC decides to renew the telco’s license, Otunu says.
But the MTN CEO does not entirely agree with the issues raised by the regulator in its assessment. Vanhelleputte said that some of the concerns are subject to interpretation and that the company has evidence to back their arguments when they finally engage with UCC.
“What is important for me is that we are largely compliant. If there are issues of non compliance, they are minor issues,” he said.
MTN Uganda is the biggest tax payer in Uganda, contributing Shs 450 billion annually, on top of creating employment and revolutionizing the telecommunications sector.
